Thai Commerce = Unprofessional Across The Board!

[klubex99]

Just assembling a frozen foods business here in LOS.

We have the company registered etc.... Everything in place including processing facility and a list of supermarkets and retail outlets waiting for the products. The premises for the manufacturing facility is in place, and we are now at the stage of sourcing the machinery and materials so we can start setting up the production lines. Everything so far has been smooth running, mainly because up till now we have not been dealing with other Thai businesses.

Over the past week or so, we have put together a long list of businesses who can supply our needs with the various things that we require to get up and running. So it was my wife's task today, to go through the list and get various pricings and make orders and generally tick things off as she goes. That's when things started to get difficult.

First she started ringing around the local abattoirs to get prices for bulk meat. First one said they only contract kill and you have to send in your own animals for slaughter, but gave us a number of another business... wrong number. So we rung around the others, and the next one replied when we asked for pricing

'don't know'.

'Well who does know?'

'my boss'.

'Can we talk to your boss?'

'don't know'.

'How can we get to talk to your boss, if you don't know?'

'don't know'

'forget it!'

Next 2 local abattoirs not answering the phone.... sheesh, great start.

Next, move on to machinery... Same results in most cases although we have managed to order about 25% of the machinery list the rest were either nobody answering phones or when they do, they seem to know nothing and pass us on to people who equally know nothing. In each case we leave our number and ask them to contact us back with the info.

Next move on to HACCP and GMP control equipment such as clothing, safety gear, hygiene equipment, temperature control devices etc.... Same same, just greeted with ignorance or nobody accepting our calls.

In summary, we have maybe got through 20% of our list of over 30 things critical for setting up the production lines.

My only alternative is to go directly to the Chinese supply route, but was wanting to avoid that because of the logistics become more complex and in a lot of cases would need to order twice what we really need so that we can cover breakdowns without it affecting production too much. So long as we source as much as we can from LOS, then we can at least call in technicians or spare parts a lot quicker than using China. Also we at least have a more tangible warranty if sourced from here, China usually always back away from any warranties.

To be honest... I doubt I have ever known such an unprofessional culture in commerce in all my time of being in business. I wonder just how much Thai business is lost to other countries based purely on the inefficiency here. Do the owners of these companys actually even know how much business their employees are losing them?

I can see what should have taken no more than 3 days, (in the UK, probably a day) is going to possibly take weeks to work through.

I am not bashing Thais, I am just telling it as it is.

TIT.

[h90]

I recall my first year here....same same.

I still source all the tools I need from Germany and Austria with difficult solutions to bypass the area protections.

Having industrial tools shipped to my mother as private customer including VAT and she sends them per regular post service to Thailand is cheaper faster and more professional than dealing with the local distributors.

[bangkockney]

Don't know why you didn't uncover these issues whilst the project was 100% on paper?

How have you given a retail price to your customers without knowing the cost of your raw materials?

Are you more upset with the status quo or this error in planning?

[CharlieH]

The other problems I faced was the "face issue"again!

You ask for delivery, quantity, timeline etc, they always say "no problem" but in reality rarely deliver what was agreed and will never ever be consistent either. They never say, no sorry cannot do that, even when they know damn well they cant do it, you never know what is true and what isnt with this stupid attitude.

DONT RELY ON ANYTHING!

As for the employees losing them money, the employees couldnt care less, its not there money or business and they can usually get another job on minimum money in a heartbeat.

Good luck with it, you'll need lots of patience and dont believe for one minute that once the supply flow starts or something is agreed that it will continue because in my experience it will change every time no matter what contingencies you put in place.

The last point I'll make is to make sure you make plenty of allowandes for what will feel like "not another f_cking holiday" !!! so many holidays and days off for this or that festival uts really difficult juggling deliveries and stock with constant flow interruptions.

Edited October 14, 2013 by CharlieH

[klubex99]

Don't know why you didn't uncover these issues whilst the project was 100% on paper?

How have you given a retail price to your customers without knowing the cost of your raw materials?

Are you more upset with the status quo or this error in planning?

Please remind me to never ask YOU for any business advice, because you clearly have no clue what the hell you are talking about. I bet you never ran a business in your life.

If you bothered to read the OP properly you would be able to see that we are in fact still setting up.

The product has been perfected and the R&D stage completed. The premises located and the equipment and suppliers list drawn up.

Who the hell issues a retail price to a customer when production has not yet been set up? It doesn't work like that and you don't build in your equipment purchasing costs, that comes back from your profits as it is classed as initial investment. You get a rough ballpark cost and price and just because I never put my costs and price in the OP doesn't mean we don't have one, it means that I didn't put it because it is irrelevant to the post.

To get the exact costs, you have to start production. Because you have to take into account fuel and running cost fluctuations, shrinkages, and a whole lot of other things you can't tell exact until you start.

As a matter of fact, we have been a lot more thorough than most start ups in the fact that we have also secured many many order enquiries (in principal) from supermarkets such as Makro, Tesco and Big C and independent retail outlets.

Another glaring fact that you seem not to understand, is that it doesn't work the same in LOS as it does in say... your country. Because unlike the UK the supermarkets here don't (or very rarely) buy orders to buy from a supplier. If they like the product, they will stock it on a share of the sales basis. So you only need to give a ballpark retail price.

So please get your facts right before commenting on the inefficiency of others, because you have just embarrassed yourself.

100% on paper .... my arse!

[klubex99]

The other problems I faced was the "face issue"again!

You ask for delivery, quantity, timeline etc, they always say "no problem" but in reality rarely deliver what was agreed and will never ever be consistent either. They never say, no sorry cannot do that, even when they know dam_n well they cant do it, you never know what is true and what isnt with this stupid attitude.

DONT RELY ON ANYTHING!

As for the employees losing them money, the employees couldnt care less, its not there money or business and they can usually get another job on minimum money in a heartbeat.

Good luck with it, you'll need lots of patience and dont believe for one minute that once the supply flow starts or something is agreed that it will continue because in my experience it will change every time no matter what contingencies you put in place.

The last point I'll make is to make sure you make plenty of allowandes for what will feel like "not another f_cking holiday" !!! so many holidays and days off for this or that festival uts really difficult juggling deliveries and stock with constant flow interruptions.

Thanks for taking the time to supply this response. At least you are constructive.

Yes... I have already taken that 'face' thing into account. These problems are not just related to LOS, it actually happens in the UK too at times, where suppliers will say anything to keep the contract and try to break their necks following it through, but knowing they will fail to produce.

That is why we will be keeping at least 1 month of production materials etc, we are even budgeting for lots of spares and contingency equipment so no matter what breaks down, we can at least have a cheap alternative to keep us running at even though reduced capacity, we are at least running and can increase the production hours on an overtime basis until we are back to normal. I like to work on the basis, we provide nice automatic equipment for you, if you break it, you go on to manual until its fixed. Employees tend to look after the auto machinery better that way.

My wife and her family are actually against the idea of Thai employees and are much in favour of Myanmar people, even if we employ them illegally. The family run quite a few businesses between them and always use Myanmar folks. They are much more reliable than the lazy Thais (their words, not mine). They also have the contacts to keep the police off their backs. I am personally a bit wary on this one, but if they say it won't be a problem... then who am I to argue?

[h90]

Don't know why you didn't uncover these issues whilst the project was 100% on paper?

How have you given a retail price to your customers without knowing the cost of your raw materials?

Are you more upset with the status quo or this error in planning?

If you want to have everything 100 % on paper you will never get it started.

Anyway no business plan survives the reality check.

When you have an exact business plan, you can usually multiply it with 2 and you are on the real costs.

Beside that no one gives you the real prices unless you are a real customer. Often there is a list price and you can get 60-70 % discount from it.

But no one will tell you. In other cases there aren't discounts. In many cases you don't get any price before some sales guy visit your production. No customer will really place orders before you can produce something. That is estimated on experience. So every business plan on the paper is something soft....Good to show the bank when asking for a credit.

Else it is just a rough estimation.

[Bcgardener]

Go The China Route, you won't regret it. get them to supply you with a Form 'E' and everything will come in duty free as long as your company is registered with Thai Customs (still need to pay VAT). You can also find China based freight forwarders who you can ship equipment to from various suppliers then they will make up one shipment to you.

We do a lot of metal fabrication and have ordered pretty much all our machinery from China. In most cases the Thai companies you would deal with for the same gear import it from China anyway and then add a 50 - 60% mark up. Most times they won't even have it in stock but will order from China when you order from then, and still stick their outrageous mark up on as it flows through. Forget about the local service aspect because you won't get any from them anyway.

One thing to remember when ordering from China, is to do your research and never go for the low ball quotes. Some machinery we have ordered from China has had a quotation spread from USD$8,000 - USD$25,000 for supposedly the same equipment. We usually aim to buy in the top third of prices and always ask for lots of information on where they source their components from etc.

[h90]

The other problems I faced was the "face issue"again!

You ask for delivery, quantity, timeline etc, they always say "no problem" but in reality rarely deliver what was agreed and will never ever be consistent either. They never say, no sorry cannot do that, even when they know dam_n well they cant do it, you never know what is true and what isnt with this stupid attitude.

DONT RELY ON ANYTHING!

As for the employees losing them money, the employees couldnt care less, its not there money or business and they can usually get another job on minimum money in a heartbeat.

Good luck with it, you'll need lots of patience and dont believe for one minute that once the supply flow starts or something is agreed that it will continue because in my experience it will change every time no matter what contingencies you put in place.

The last point I'll make is to make sure you make plenty of allowandes for what will feel like "not another f_cking holiday" !!! so many holidays and days off for this or that festival uts really difficult juggling deliveries and stock with constant flow interruptions.

Thanks for taking the time to supply this response. At least you are constructive.

Yes... I have already taken that 'face' thing into account. These problems are not just related to LOS, it actually happens in the UK too at times, where suppliers will say anything to keep the contract and try to break their necks following it through, but knowing they will fail to produce.

That is why we will be keeping at least 1 month of production materials etc, we are even budgeting for lots of spares and contingency equipment so no matter what breaks down, we can at least have a cheap alternative to keep us running at even though reduced capacity, we are at least running and can increase the production hours on an overtime basis until we are back to normal. I like to work on the basis, we provide nice automatic equipment for you, if you break it, you go on to manual until its fixed. Employees tend to look after the auto machinery better that way.

My wife and her family are actually against the idea of Thai employees and are much in favour of Myanmar people, even if we employ them illegally. The family run quite a few businesses between them and always use Myanmar folks. They are much more reliable than the lazy Thais (their words, not mine). They also have the contacts to keep the police off their backs. I am personally a bit wary on this one, but if they say it won't be a problem... then who am I to argue?

When we import something for a customer and it needs 14 days. Automatically the sales guys want to write 3 days on the quotation. Telling that if they write 14 days they customer don't want to buy it

We have the problem that our Thai employees don't report it, if it isn't a critical system, unless nothing is working anymore. Most of our staff are Southern Thais and they do a good job. But don't ask me how many people we had to hire and fire....

[h90]

Go The China Route, you won't regret it. get them to supply you with a Form 'E' and everything will come in duty free as long as your company is registered with Thai Customs (still need to pay VAT). You can also find China based freight forwarders who you can ship equipment to from various suppliers then they will make up one shipment to you.

We do a lot of metal fabrication and have ordered pretty much all our machinery from China. In most cases the Thai companies you would deal with for the same gear import it from China anyway and then add a 50 - 60% mark up. Most times they won't even have it in stock but will order from China when you order from then, and still stick their outrageous mark up on as it flows through. Forget about the local service aspect because you won't get any from them anyway.

One thing to remember when ordering from China, is to do your research and never go for the low ball quotes. Some machinery we have ordered from China has had a quotation spread from USD$8,000 - USD$25,000 for supposedly the same equipment. We usually aim to buy in the top third of prices and always ask for lots of information on where they source their components from etc.

The machinery quality is OK?

I got warned many times from Chinese production machines.

[bangkockney]

Don't know why you didn't uncover these issues whilst the project was 100% on paper?

How have you given a retail price to your customers without knowing the cost of your raw materials?

Are you more upset with the status quo or this error in planning?

Please remind me to never ask YOU for any business advice, because you clearly have no clue what the hell you are talking about. I bet you never ran a business in your life.

If you bothered to read the OP properly you would be able to see that we are in fact still setting up.

The product has been perfected and the R&D stage completed. The premises located and the equipment and suppliers list drawn up.

Who the hell issues a retail price to a customer when production has not yet been set up? It doesn't work like that and you don't build in your equipment purchasing costs, that comes back from your profits as it is classed as initial investment. You get a rough ballpark cost and price and just because I never put my costs and price in the OP doesn't mean we don't have one, it means that I didn't put it because it is irrelevant to the post.

To get the exact costs, you have to start production. Because you have to take into account fuel and running cost fluctuations, shrinkages, and a whole lot of other things you can't tell exact until you start.

As a matter of fact, we have been a lot more thorough than most start ups in the fact that we have also secured many many order enquiries (in principal) from supermarkets such as Makro, Tesco and Big C and independent retail outlets.

Another glaring fact that you seem not to understand, is that it doesn't work the same in LOS as it does in say... your country. Because unlike the UK the supermarkets here don't (or very rarely) buy orders to buy from a supplier. If they like the product, they will stock it on a share of the sales basis. So you only need to give a ballpark retail price.

So please get your facts right before commenting on the inefficiency of others, because you have just embarrassed yourself.

100% on paper .... my arse!

I just asked some simple questions and you get highly defensive and aggressive. Why is that?

I'm not interested in a pissing contest, only to say yes I do run a business here. And have done in the UK. So I'll take your bet and stake whatever you fancy - how about a million baht? Put up or shut up.

But why didn't you make any of these enquiries as part of the planning phase?

A simple, non-emotive question that draws anger from you.

The point being it's easy to identify the issues you are now facing and to plan for them in advance, without resulting in a ranting attitude and lots of stress while you have customers waiting.

I asked my wife what likely issues we'd face when setting up here and burnt the phones before investing a single penny, to get the lay of the land.

I fail to understand your outrage at a problem that consumers here understand, let alone business people.

[klubex99]

Don't know why you didn't uncover these issues whilst the project was 100% on paper?

How have you given a retail price to your customers without knowing the cost of your raw materials?

Are you more upset with the status quo or this error in planning?

Please remind me to never ask YOU for any business advice, because you clearly have no clue what the hell you are talking about. I bet you never ran a business in your life.

If you bothered to read the OP properly you would be able to see that we are in fact still setting up.

The product has been perfected and the R&D stage completed. The premises located and the equipment and suppliers list drawn up.

Who the hell issues a retail price to a customer when production has not yet been set up? It doesn't work like that and you don't build in your equipment purchasing costs, that comes back from your profits as it is classed as initial investment. You get a rough ballpark cost and price and just because I never put my costs and price in the OP doesn't mean we don't have one, it means that I didn't put it because it is irrelevant to the post.

To get the exact costs, you have to start production. Because you have to take into account fuel and running cost fluctuations, shrinkages, and a whole lot of other things you can't tell exact until you start.

As a matter of fact, we have been a lot more thorough than most start ups in the fact that we have also secured many many order enquiries (in principal) from supermarkets such as Makro, Tesco and Big C and independent retail outlets.

Another glaring fact that you seem not to understand, is that it doesn't work the same in LOS as it does in say... your country. Because unlike the UK the supermarkets here don't (or very rarely) buy orders to buy from a supplier. If they like the product, they will stock it on a share of the sales basis. So you only need to give a ballpark retail price.

So please get your facts right before commenting on the inefficiency of others, because you have just embarrassed yourself.

100% on paper .... my arse!

I just asked some simple questions and you get highly defensive and aggressive. Why is that?

I'm not interested in a pissing contest, only to say yes I do run a business here. And have done in the UK. So I'll take your bet and stake whatever you fancy - how about a million baht? Put up or shut up.

But why didn't you make any of these enquiries as part of the planning phase?

A simple, non-emotive question that draws anger from you.

The point being it's easy to identify the issues you are now facing and to plan for them in advance, without resulting in a ranting attitude and lots of stress while you have customers waiting.

I asked my wife what likely issues we'd face when setting up here and burnt the phones before investing a single penny, to get the lay of the land.

I fail to understand your outrage at a problem that consumers here understand, let alone business people.

Rubbish. You were being critical, not merely asking questions.

As far as 'why didn't you make these enquiries as part of the planning phase?'

Answer... I already said we made a full list of requirements and sourced all the manufacturers and suppliers of everything on the list. At some point you have to pick up the phone and send emails as you work through that list. We haven't just used guess work. Every item on our list has several manufacturer/suppliers on it based in LOS from info we got from the internet..

Waste of time.... Anyway... Thailand has had its chance, we are sourcing from overseas now and are racing through the list.

[Bcgardener]

Go The China Route, you won't regret it. get them to supply you with a Form 'E' and everything will come in duty free as long as your company is registered with Thai Customs (still need to pay VAT). You can also find China based freight forwarders who you can ship equipment to from various suppliers then they will make up one shipment to you.

We do a lot of metal fabrication and have ordered pretty much all our machinery from China. In most cases the Thai companies you would deal with for the same gear import it from China anyway and then add a 50 - 60% mark up. Most times they won't even have it in stock but will order from China when you order from then, and still stick their outrageous mark up on as it flows through. Forget about the local service aspect because you won't get any from them anyway.

 

One thing to remember when ordering from China, is to do your research and never go for the low ball quotes. Some machinery we have ordered from China has had a quotation spread from USD$8,000 - USD$25,000 for supposedly the same equipment. We usually aim to buy in the top third of prices and always ask for lots of information on where they source their components from etc.

 

The machinery quality is OK?

I got warned many times from Chinese production machines.

A lot of people that buy from China will take the cheapest quote and end up with rubbish. As i said, you need to do your research. For our equipment we always check that the key components are from reputable non Chinese manufacturers ie hydraulics. In some cases the cosmetic finish is not up to Western standards but the reliability is okay.

Sent from my GT-I9300 using Thaivisa Connect Thailand mobile app

[Thai at Heart]

Go The China Route, you won't regret it. get them to supply you with a Form 'E' and everything will come in duty free as long as your company is registered with Thai Customs (still need to pay VAT). You can also find China based freight forwarders who you can ship equipment to from various suppliers then they will make up one shipment to you.

We do a lot of metal fabrication and have ordered pretty much all our machinery from China. In most cases the Thai companies you would deal with for the same gear import it from China anyway and then add a 50 - 60% mark up. Most times they won't even have it in stock but will order from China when you order from then, and still stick their outrageous mark up on as it flows through. Forget about the local service aspect because you won't get any from them anyway.

One thing to remember when ordering from China, is to do your research and never go for the low ball quotes. Some machinery we have ordered from China has had a quotation spread from USD$8,000 - USD$25,000 for supposedly the same equipment. We usually aim to buy in the top third of prices and always ask for lots of information on where they source their components from etc.

Have to agree.

At least get competing quotes from China and compare. If I have heard "mai mee satock, sang dai" once in Thailand,.....

It just wants you to ask, "so what is the point in you being the bloody distributor?"...

[JLCrab]

This page describes the process for getting new items stocked at Makro:

http://www.siammakro.co.th/en/supplier_apply.php

[NeverSure]

Is there any chance you could source the Chinese equipment from your home country, or even the US, which would be much cheaper than Europe?

The reason I say that as a hunch, is that many really big companies buy Chinese products and have them branded to the Western retailer's name. They are good quality and much cheaper than Western made things.

Also, has anyone else noticed that a lot of Chinese stuff sold in Thailand is pure crap?

There is a company called Rigid. All of my life and long before they made plumbing tools such as thread cutting machines for iron pipe. They never made things like drills or mechanics' wrenches. Lowes cut a deal with them to use their name, and have a whole line of Rigid branded tools made in China to Lowes' standards. The products are good, and the prices are right. I have outright abused their cordless sawsall by using it in the dirt installing a huge inground sprinkler system. I hoped it would just last long enough to do that job, but it's still going strong.

General Electric never made a hot water heater. But Home Depot cut a deal with them to use their name on a hot water heater line made in China. It is made to Home Depot standards, approved by GE, is priced right, and most people don't know it isn't really GE.

I don't know what you need, but a big (American?) supplier with a good reputation who has Chinese products should work out fine. They will buy in bulk and you may find their prices aren't much more than China direct, and you'll get some quality assurance and good service.

Good luck with your venture.